IN LIKE A LAMB, OUT LIKE A LION: There’s no way Republicans will be able to put a good spin on the results from the special election last night in Pennsylvania’s 18th Congressional district. After being outspent 4-1, Democrat Conor Lamb has a razor-thin 641 vote lead in a district carried by both President Trump and Mitt Romney by 20 points and has been safely in Republican hands since the turn of the 21st century. While Lamb declared himself the victor over Republican Rick Saccone in the wee hours of the morning – there are still absentee, provisional and military ballots to be counted in one county as well as the potential for a recount to be requested by the trailing candidate/campaign if the margin is less than %.5. A recount is not triggered automatically. The special election trend that began in the spring of 2017 showing once-healthy double-digit leads disappearing in Republican districts continues to roar. Couple that with statewide wins in Virginia, New Jersey and Alabama and Republicans on Capitol Hill will be scrambling to find ways to stanch the bleeding. Our quick takeaways: 1. we’re likely to see a handful of additional Republican retirements with Members of Congress not wanting to run in this climate, 2. there are over 100 Congressional districts that are more competitive than PA-18 so the field may have just expanded beyond the 35-40 seats that are the most competitive year-in-year-out and potentially putting more seats in play for the Democrats, 3. Democrats will not be able to run on a unified agenda pitting the Warren/Sanders wing against more moderate members who will buck the party (and Nancy Pelosi) to run campaigns tailored to their constituencies.
BANK BILL'S UNEASY ADVANCE: Consideration of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act will continue today likely without amendments stifling both progressive Democrats and Republicans in the House who will likely have to swallow whatever the Senate passes. The bill – a bipartisan compromise between Banking Chairman Mike Crapo (R-ID) and moderate Committee Democrats – would raise the asset threshold for systemically important financial institutions (SIFI) designation from $50 billion to $250 billion, and immediately end stricter oversight for institutions with less than $100 billion - among other reforms. While the bill has garnered support from 13 moderate Democrats, the measure has been met with strong opposition from a significant cohort of progressive Democrats led by Senator Elizabeth Warren (D-MA) and is causing just a little heartburn for Minority Leader Chuck Schumer. The internal dynamics within the Democratic Caucus have complicated the schedule for the week, as Senators have been unable to reach an agreement on moving ahead with votes on some of more than 150 amendments filed to the bill. While the Senate neared an agreement last week to have four votes – two amendments per side – the agreement was ultimately objected to by some Democrats who wanted more amendments. While Chairman Crapo’s Manager’s Amendment incorporates a number of bipartisan House-passed measures, Financial Services Committee Chairman Jeb Hensarling (R-TX) has stated the Senate bill does not go far enough and must include more provisions to reflect “the will of the House.” Hensarling released a list of recommended House-passed bills for inclusion last week. We expect the House to press its case regarding the need to go to conference, though it remains to be seen how this will play out. Our state of play summary including a list of amendments here. We will be hosting a conference call tomorrow, March 15 at 1:30 pm, on the changing dynamics – call details here.
STANDING UP, STANDING DOWN: Republicans in the Senate are split on the best way to counteract President Trump imposition of tariffs on imported steel and aluminum. Senators Jeff Flake (R-AZ), Mike Lee (R-UT) and others are forging ahead with legislation to nullify the tariffs or require Congressional approval for trade deals while Senate Majority Leader Mitch McConnell and Senator John Cornyn feel their efforts to scale back Trump’s tariffs is taking hold and legislative pushback would only end up provoking Trump and causing an unwanted rift within the Republican ranks in an already challenging political climate. McConnell and his leadership allies are very likely to prevail, but Flake, Lee, and others aren’t ready to give up without sending a signal to 1600 Pennsylvania Avenue.
TILLERSON'S DEPARTURE SIGNALS END OF IRAN NUCLEAR DEAL AND HIGHER OIL PRICES: OUr Senior Energy Analyst Joe McMonigle writes that Trump faces a May 12 deadline to waive oil sanctions on Iran to preserve nuclear deal. Venezuela sanctions may also be impacted. Read his note here.
ZOMBIE PROCUREMENT | CERNER'S VA CONTRACT - NOT QUITE DEAD, NOT REALLY ALIVE: Our Healthcare Policy Senior Analyst writes on the future of the VA EHR modernization program hinges on the politics of privatization and things are not looking good. Emily's piece here.
WHITE HOUSE EMBRACES 5G INNOVATORS: (QCOM, INTC, AVGO): The Administration doubles down on the importance of America's 5G network innovators, a favorable policy trend for domestic IP leaders. Read Paul Glenchur's piece here.
